Williams-Sonoma, Inc. Delivers Another Solid Quarter

Williams-Sonoma (NYSE: WSM)announced strong first-quarter 2017 results on Wednesday after the market closed. After initially climbing more than 8% on the news, shares of the home-furnishings retailer drifted lower, to fall a modest 1% as the company reaffirmed its full-year guidance.

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Let's take a closer look at how Williams-Sonoma kicked off the year, as well as what investors can expect from the company going forward.

What happened with Williams-Sonoma this quarter?

On an adjusted (non-GAAP) basis -- which adds perspective by excluding severence-related charges and the tax impact of adopting new accounting rules over the past year -- earnings were $0.51 per share, down from $0.53 per share in the same year-ago period.

These results compared favorably to Williams-Sonoma's guidance, which called for revenue of $1.085 billion to $1.120 billion and earnings per share (EPS) of $0.45 to $0.50.

Comparable-brand revenue increased 0.1% -- versus guidance for comps to be in the range ofnegative 1% to positive 2%-- including:

a 1.4% decline at Pottery Barn

3.2% growth at Williams Sonoma

6% growth at West Elm

a 5.7% decline at Pottery Barn Kids

a 14.3% decline at PBTeen

Repurchased 764,543 shares for $38 million, or an average cost of $50.16 per share. That left $372 million remaining under Williams-Sonoma's current repurchase authorization.

What management had to say

Williams-Sonoma CEO Laura Alber stated:

Looking forward

For the fiscal second quarter, Williams-Sonoma anticipates revenue of $1.195 billion to $1.23 billion, assuming comparable-brand revenue growth of 2% to 5%. That should result in EPS in the range of $0.55 to $0.61. By comparison, investors were expecting earnings near the high end of that range on revenue of just $1.19 billion.

For the full fiscal year of 2017, Williams-Sonoma reiterated its previous guidance for revenue of $5.165 billion to $5.265 billion, which still assumes comparable-brand revenue growth of 1% to 3%. Williams-Sonoma also continues to expect adjusted full-year earnings of $3.45 to $3.65.

In the end, apart from the improvement at Pottery Barn, where comps declined 4.1% last quarter,there were no big surprises from Williams-Sonoma in this report -- and that's fair enough considering the company continues to operate in a relatively difficult retail environment. As long as Williams-Sonoma keeps achieving modest top-line growth, while making progress on its supply chain and operational efficiency initiatives, I think investors should be pleased with where it stands.

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